Mortgage payments for many homeowners are at critical levels.  California mortgage holders (and other states)  have defaulted in increasing numbers for several years, leading the nation in foreclosures.   Its important that the homeowners take control of their situation and refinance mortgages (remortgage) sooner rather than later.  Mortgage refinance can help you and your family survive any economic hardships in the future.

Refinancing a mortgage essentially means paying off an existing loan and replacing it with a new one. Homeowners may decide to consider refinancing for a number of reasons.  Potential reasons include: the chance to lock in to a lower interest rate; an opportunity to shorten the term of the mortgage; wanting to convert from an ARM to a fixed-rate mortgage (or vice versa); tapping into equity to finance another purchase; or to consolidate debt.

There are potential benefits as well as risks. But, if you want to refinance as a way of building equity more quickly, you’ll want to focus primarily on how refinancing can:

•  help get lower interest rate;
• shorten the term of your mortgage; and
• Move from adjustable rate to a fixed rate mortgages. This is where over the long term, you can build equity much faster than doing nothing
  

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One of the best reasons to refinance is to lower the interest rate on loan you already have. The rule of thumb has usually been said to be that it was worth the money to refinance if you could reduce your interest rate by at least 2%. Today, however, many lenders say 1% savings is enough incentive to refinance.  Decreasing your interest rate not only helps you save money, but increases the rate at which you build equity in your home, and can decrease the size of your monthly payment.  When should you refinance?